A US International Trade Commission judge has ruled that two patents held by S3 are being infringed by some of Apple's Mac computers, but invalidated two other patents and stated that Apple's iOS devices are not infringing any of the S3 patents.

According to a report by Bloomberg, the S3 patents, held by the Fremont, California image compression technology firm, have been acquired by Taiwanese smartphone maker HTC for $300 million in an effort to defend that company's Android-based smartphones from iPhone patents leveraged by Apple.

ITC judge James Gildea's ruling reduced the scope of the two S3 patents found to be valid and infringed upon by Mac OS X, and further noted that Macs using Nvidia graphics chips have an implied license to use the patents, limiting Apple's potential liability. If the ruling is upheld by the ITC's six member committee, it could result in the US import of affected Macs being banned.

However, the ITC's finding that Apple's iPhone, iPod touch and iPad are not infringing S3's patents greatly reduces the bargaining power HTC hoped to use in getting Apple to drop its own ITC patent complaints related to smartphones.

The ITC had separately ruled that HTC's Android phones infringed two Apple patents, which could lead to an import ban of HTC phones if similarly upheld by committee. The report noted that Apple has filed a separate complaint with the ITC involving HTC's Flyer tablet (shown below) in addition to its Android smartphones.

A report on the specific patent claims HTC has been found guilty of violating suggests that the infringing technologies are part of the Android architecture, rather than unique enhancements made by HTC. As such, competing Android vendors such as Motorola and Samsung may also be at risk.

HTC and Apple continue to negotiate a settlement to the issues, with HTC's chief financial officer Winston Yung being cited in the report as describing the talks as "on and off." Earlier, Yung has reportedly said the two companies "have have to sit down and figure it out," adding, "we're open to having discussions."

At the same time, HTC's general counsel Grace Lei recently complained to the press that "HTC is disappointed at Apple's constant attempts at litigations instead of competing fairly in the market," adding that "HTC strongly denies all infringement claims by Apple in the past and present and reiterates our determination and commitment to protect our intellectual property rights."

Last week, analyst Mike Abramsky with RBC Capital Markets stated that Apple is likely to demand a high royalty for Android devices, potentially asking for as much as or more than Microsoft already collects from HTC's Android devices.

A series of such royalty fees hitting Android makers could result in making the ostensibly free software more expensive in the long run than custom development. A variety of Android licensees, ranging from Samsung to Motorola, already have or are rumored to be developing their own software independently from Android to hedge such an outcome.

Two of Android's fastest growing licensees in China, Huawei and ZTE, have reportedly begun evaluating the use of Microsoft's Windows Phone 7, suggesting that at least some makers see Microsoft's product as safer than Android. HTC could also see its Android business cannibalized by smaller firms hoping to fly under the radar, and unnoticed by Apple's legal efforts to protect its intellectual property.

How many Macs are in use that are infringing? How many HTC devices that are infringing? What level of infringement as a dollar value does this account for in each camp? Too many unknowns at this point to call the game.

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

HTC is disappointed at Apple's constant attempts at litigations instead of competing fairly in the market

So Apple spends years and years investing in developing their own operating systems for their own hardware. HTC grabs an off-the-shelf OS and invest very little effort on their part and want to accuse Apple of not wanting to compete fairly!?

Sorry, but both Microsoft and Apple have invested millions, if not billions of dollars in research, developing, testing, producing, and maintaining their operating systems, you better believe they're both going to make sure no one is stealing their IP.

Neither go after Android (Google) directly, because Google doesn't profit from Android development. It's the OEMs that are pushing the OS on the market to sell their devices and [hopefully] profit from the sales.

Disclaimer: The things I say are merely my own personal opinion and may or may not be based on facts. At certain points in any discussion, sarcasm may ensue.

How many Macs are in use that are infringing? How many HTC devices that are infringing? What level of infringement as a dollar value does this account for in each camp? Too many unknowns at this point to call the game.

Hmm, pretty much all macs use either Intel or AMD graphics as of right now, but remember this result is only preliminary. It will be a while before any final ITC panel ruling, Apple may be able to reduce the potential damage considerably in advance now that they know the exact claims that they have to worry about - and on which products.

Sorry, but both Microsoft and Apple have invested millions, if not billions of dollars in research, developing, testing, producing, and maintaining their operating systems, you better believe they're both going to make sure no one is stealing their IP.

You did notice that this was a case in which Apple was the defendant right?

No kidding. Somehow I think that this ruling is a major disappointment for HTC. They missed the jackpot (iPhone and iPad) and Apple is left with a way out. Meanwhile, Apple still has the power to seriously hurt them.

You did notice that this was a case in which Apple was the defendant right?

Yes I did notice that... Sorry, I thought it was obvious I was referring to HTC's statement, "HTC is disappointed at Apple's constant attempts at litigations instead of competing fairly in the market", apparently it wasn't that obvious!?

At this point it's safe to say that Apple can compete fairly, and not only that, demonstrate their ability to steer markets in new directions.

I'd also like to point out this statement from HTC, "HTC strongly denies all infringement claims by Apple in the past and present..."

Uh, HTC didn't develop Android, how could they possibly know if Android doesn't violate another company's IP. They, in fact, KNOW IT DOES. Why else are they paying Microsoft a royalty for every Android device they sell!?

Disclaimer: The things I say are merely my own personal opinion and may or may not be based on facts. At certain points in any discussion, sarcasm may ensue.

I'd also like to point out this statement from HTC, "HTC strongly denies all infringement claims by Apple in the past and present..."

Now you're just being silly - of course an HTC exec is going to insist that they're not infringing, an Apple exec or lawyer would insist that they aren't either. No firm will ever admit that it is or even might be infringing IP until after the ink is dry on the licensing agreement or the judgement has been handed down in the courts. It would be a monumental cock-up to admit it in public beforehand.

No kidding. Somehow I think that this ruling is a major disappointment for HTC. They missed the jackpot (iPhone and iPad) and Apple is left with a way out. Meanwhile, Apple still has the power to seriously hurt them.

It's not a great way out though, they may well prefer a software solution to having to re-engineer the mac book air just after doing a release.

Apple has had its hands in UNIX since the late 80's when they developed A/UX; a UNIX based operating system for their Macintosh computers. They also started the mkLinux project in the mid 90's in an attempt to port Linux to the PowerPC / Mach kernel. Then in 1996 Apple bought a company called NeXT, who's operating system, NextStep, was developed in the mid 80's and was a fork of BSD 4.2 or 4.3. Mac OS X is actually based off NeXT's operating system, but with major changes. Then around 2002 or 2003 Apple released the BSD (UNIX) layer of OS X called Darwin as an open source project. Anyone who knew UNIX could easily see that the system was vastly different from the "standard" BSD distributions at the time. (I know, I used it as web server and network router for a couple of years and finding documentation was extremely difficult.)

So yeah, they've even spent a lot of time and resources on UNIX.

However, from 1984 through 2001 Apple developed the Mac OS, which was not UNIX. Also, from the 80's until the late 90's they developed the Newton OS, which was also not UNIX. The patents HTC was found guilty of violating were from 1996, and the IP was used both in the Mac OS and Newton OS. Furthermore, they also developed DOS and ProDOS for their Apple II computers and they developed the Lisa OS, which was much more advanced than even the Mac OS when it was first released a year later.

So I'd say that Apple has invested a lot in operating system development for a very long time now, in fact, even longer than Microsoft.

Disclaimer: The things I say are merely my own personal opinion and may or may not be based on facts. At certain points in any discussion, sarcasm may ensue.

At this stage that would appear to be an exceedingly premature assumption. This patent could easily result in an injunction on MacBook Airs, and that alone would force Apple to enter a cross-license with HTC.

Now you're just being silly - of course an HTC exec is going to insist that they're not infringing, an Apple exec or lawyer would insist that they aren't either. No firm will ever admit that it is or even might be infringing IP until after the ink is dry on the licensing agreement or the judgement has been handed down in the courts. It would be a monumental cock-up to admit it in public beforehand.

I agree with you... but, that wasn't the point of my statement.

Disclaimer: The things I say are merely my own personal opinion and may or may not be based on facts. At certain points in any discussion, sarcasm may ensue.

Apple has had its hands in UNIX since the late 80's when they developed A/UX; a UNIX based operating system for their Macintosh computers. They also started the mkLinux project in the mid 90's in an attempt to port Linux to the PowerPC / Mach kernel. Then in 1996 Apple bought a company called NeXT, who's operating system, NextStep, was developed in the mid 80's and was a fork of BSD 4.2 or 4.3. Mac OS X is actually based off NeXT's operating system, but with major changes. Then around 2002 or 2003 Apple released the BSD (UNIX) layer of OS X called Darwin as an open source project. Anyone who knew UNIX could easily see that the system was vastly different from the "standard" BSD distributions at the time. (I know, I used it as web server and network router for a couple of years and finding documentation was extremely difficult.)

So yeah, they've even spent a lot of time and resources on UNIX.

However, from 1984 through 2001 Apple developed the Mac OS, which was not UNIX. Also, from the 80's until the late 90's they developed the Newton OS, which was also not UNIX. The patents HTC was found guilty of violating were from 1996, and the IP was used both in the Mac OS and Newton OS. Furthermore, they also developed DOS and ProDOS for their Apple II computers and they developed the Lisa OS, which was much more advanced than even the Mac OS when it was first released a year later.

So I'd say that Apple has invested a lot in operating system development for a very long time now, in fact, even longer than Microsoft.

Well said. Everyone wants to make this into a game of the chicken or the egg but there is absolutely no question here that Apple has been in the mobile device game for a lot longer than HTC, and we all know the iPhone was first of it's kind to market. When you follow in someone else's footsteps it is your responsibility to make sure you don't step on their heels. If you want to pass someone blazing a trail like Apple wait for them to slow down & then sprint.

Apple has fought it's way back from the dead & they did so by pushing the market, without them HTC & others would still be pushing crappy BBerry competitors & Win Mobile 7 may never have been born. Everyone sat around for like 10 years saying Apple was going to be a passing fad & then all of a sudden Apple is kicking their tail and so they are whining about it. Big bad Apple, shame on them for doing what others could not.

All the Apple haters need to recognize what the market was before Apple became a serious force to be reckoned with, the state of the smart phone and tablet was a pathetic joke.

A series of such royalty fees hitting Android makers could result in making the ostensibly free software more expensive in the long run than custom development. A variety of Android licensees, ranging from Samsung to Motorola, already have or are rumored to be developing their own software independently from Android to hedge such an outcome.

The problem is not how much it would cost to create a new OS but would developers support it. No apps and you are dead in the water. The market can support more than one OS but it cannot support every hardware company having it's own unique OS.

So for most hardware companies their best option is to use a common OS, which right now is either Android (which does have costs but can at least be customized to differentiate it from all the other phones out there) or Windows Phone which is not free and cannot be customized.

Even if Microsoft, Apple and Oracle all demand a cut, Android is probably still the best bet for other manufacturers.

Except it is Android that is the problem so could Apple let HTC have some agreement without letting Android of the hook? That's the bigger fish.

Yes, S3 is only going to save HTC (if even them) - but any of the other android firms could turn out to have their own ace in the hole. HTC was the best bet for a firm that had no defence at all because they're a very new entrant.

If Apple had killed them off then it would have poisoned Android for ZTE and others, at least for the US market. They'd have been sent back to the drawing board. As it is they're still probably pretty skittish.

I think apple will have to come to a deal with HTC and othe android device makers if they win their claims agains HTC.

HTC and Samsung are the of apples biggest competitors in the US at the moment, and so their might be some anti-competative pressure on apple to licence and not ban. And Symbiam was always nothing in the US and windows is loosing market share in most places despite Phone 7.

Of course I am no lawyer and not even American. Maybe some of the legally aware Americans can provide some comment.

Yeah right, cos put a very nice, (normal) user friendly GUI on top of Unix is really easy. Seeing as how every Linux desktop GUI I've used as quite nasty and overly complicated, there has been significant investment by Apple, on that front alone.

Yes I did notice that... Sorry, I thought it was obvious I was referring to HTC's statement, "HTC is disappointed at Apple's constant attempts at litigations instead of competing fairly in the market", apparently it wasn't that obvious!?

At this point it's safe to say that Apple can compete fairly, and not only that, demonstrate their ability to steer markets in new directions.

I'd also like to point out this statement from HTC, "HTC strongly denies all infringement claims by Apple in the past and present..."

Uh, HTC didn't develop Android, how could they possibly know if Android doesn't violate another company's IP. They, in fact, KNOW IT DOES. Why else are they paying Microsoft a royalty for every Android device they sell!?

These are PR statements. It's pointless to discern facts and intentions from them.

What for? The patent has nothing to do with AMD. The reference to Nvidia deals with a cross-licensing agreement that goes back to 2000.

Because every NVDIA using device is non-infringing of course. The patent has nothing to do with AMD, but by replacing discrete graphics with NVIDIA they can reduce the scope of infringement significantly.

I betcha most people here don't care. Interesting that, in this thread, no one is calling out Apple for their infringement. No one is calling them thieves.

Well that's to be expected, I'm more perplexed by the way that people seem to be misreading the result as being a win for Apple. The revenue of affected product is probably around the same as HTCs total revenue!